Some people’s incomes aren’t based on a traditional salary model. In cases where your monthly income may fluctuate or the majority of your income arrives in bonuses or contract payments, it’s important to have flexibility in your mortgage solution.
Interest only loans offer a smaller monthly payment because you are only responsible for the interest amount on the principal of the loan each month. The payment is calculated on a month-to-month basis so that when you do pay above and beyond the interest to reduce that principal, the monthly interest owed is reduced and your required payment is lowered even further.
If your monthly income doesn’t necessarily follow a traditional W2 salary track, you may want to consider an interest only loan.
